STILL MORE TAXES

Wairarapa Times-Age, 2 August 1939, Page 5

STILL MORE TAXES

HEAVY NEW DEMANDS MADE IN BUDGET Higher Income Rates and Death Duties ANOTHER MILLION OF REVENUE FROM PETROL INCREASE IN THE BEER DUTY HUGE EXPENDITURE ON PUBLIC WORKS (By Telegraph—Special to the “Times-Age.”) WELLINGTON, This Day. Additional taxation estimated to yield £2,500,000 a year is announced in the Budget presented in the House of Representatives last evening by the Prime Minister (Mr Savage) in his capacity as Acting-Minister of Finance. ■ The basic rate* of income lax is io be increased for individuals from Is 8d io 2s in Hie £ and the general exemption is to be reduced from £2lO to £200; petrol tax and beer duty are io be increased by fourpence ami sixpence a gallon respectively; and the scales for estate succession and gift duties are to be raised by approximately 20 per cent, ihe basic, rate of company taxation is to go rip from Is to 2s in the £• The current year’s proposals involve a total Consolidated Fund expenditure of £38,243.000. Revenue is estimated at. £35.700.000. leaving a shortage of £2,483,000 to be provided from additional taxation. The higher rates it is intended, to impose are expected to produce an extra £2,500,000, leaving an estimated surplus of £17,000 for the year. The surplus of £809,000 from last financial year is to be transferred to Hu* Social Securilv Fund.

The Public Works programme outlined provides for the expenditure of £23.917,000 during the year, and of this sum £19,062.000 is to come from loan money. The total expenditure by the Government on housing to -July 31 was £7,106,000, and the total commitment since the inception of the scheme is approximately £10,000.000. Defence expenditure this financial year will amount to £5,400.000.

The public debt was increased during the past year by £13,768.930. and the total indebtedness of the Dominion is now £303,970,272. Of this sum £156,853,016 is domiciled in London, £146,237,656 in New Zealand, and the balance in Australia. A national savings scheme is to be inaugurated to provide an avenue of investment for small sums.

The import restrictions are stated to be temporary. They are to be relaxed as the need for them passes. The iron ore deposits in Onekaka are to be developed, and plant is to be constructed involving a capital outlay of £5,000,000 spread over three and a half years.

The Budget .was shorter than usual. Mr Savage was an hour and a quarter in reading the document, after which he formally fabled a copy of the statement, and the estimates of revenue and expenditure. Resolutions were then brought down

imposing the higher rates of beer duty and petrol tax, urgency being taken for the passing of these. The public galleries were well tilled.

THIS YEAR’S EXPENDITURE. Discussing the 1939-40 financial proposals, Mr Savage said that so far as expenditure was concerned the estimates provide for a continuation of existing services. Debt charges show an increase of £741.000, of which provision for interest for a full year on new borrowing for last year and anticipated borrowing to finance this year's capital expenditure programme accounts for £535,000. The balance, for the most part, arises from the automatic increase in the item for repayment of public debt. The coming into operation of the Social Security Act is reflected in some relatively large changes in the estimates. The items for pensions, apart from war pensions, have disappeared from the Consolidated Fund estimates, and have been replaced by a new vote providing for the transfer of £2,000,000 to the Social Security Fund.

SOCIAL SERVICES. The votes for education and health show an increase of £547,000, but, even so, for the reason stated, the aggregate for all the votes grouped under the heading of “Social Services” is approximately £2,300.000 less than for last year. Against this the disappearance of the Employment Promotion Fund has rendered it necessary to make some provision under the Consolidated Fund for promotion of employment, as these subsidies cannot be discontinued all at once. Accordingly, for the purpose, £2,500,000 has been provided under vote “Labour,” and £400,000 under vote “Native.” These adjustments involve a net increase of approximately £600,000 in the expenditure from the Consolidated Fund.

(Continued on page 9.)